Archive for March, 2009

The Blind Spot of Economic Thought

Saturday, March 7th, 2009 | Uncategorized | 24 Comments

The crisis of our time is not about a financial bankruptcy (which is part of the symptom). the crisis of our time is about an intellectual bankruptcy (which has more to do with the underlying root issue): the bankruptcy of contemporary economic thought. not only was the entire mainstream of economic thought caught by surprise when the meltdown started to happen in Fall 08. even now, several months into the depression economics, we are still at a loss. millions of words. talkshows. and detailed expert analysis. yes, we know a lot about all the details. but what do we really know? what do we really know about what is going on and what is going to happen and what is required of us to do now?

when i watch the current conversation i am almost in disbelieve how narrow the analytical economic frameworks are that we apply to understanding the current situation: more markets was the mantram yesterday. more government is the mantram today (although the obama administration still does not dare to use the N word–nationalization–which probably only means that the nationalization, which is going to come anyway, will come a little later, a little less voluntarily (that is, forced upon by circumstances) and a lot more expensive (trillions more).

what strikes me is how conventional the economic thought is that the current public discussion (including the Obama economic team) is applying to the situation. no one doubts that stimuli packages, re-regulation and temporary nationalization of banks are necessary. but is that all we can do? this still sounds like a 20th century mindset (markets vs. government) applied to a 21st century type of challenge (meltdown). what we will probably find out soon is that this no longer works. we cannot be successful by applying 20th century mindsets to 21st century problems. we need to approach problems of our age in new ways. in ways that illuminate the blind spot of contemporary economic thought: collective awareness based leadership.

conventional economic thought and policy assumes that the awareness (and preferences) of econmic actors are given. but in reality we know that this is not true. all real world deep change work revolves around helping communities and people to wake up to and start operating from a highler level of awareness (and self) which then gives rise to new types of collective creativity and action.  that is the missing piece not only in the current approach to the crisis, but also in our way of making sense of what is going on. and that is the line of thought that our Presencing Institute iniative on transforming capitalism will bring into the conversation over the next couple of months (see Theory U, chapter 19, as a first outline).

the interesting thing is that even in the heartland of conventional economic thought–like The World Bank–you find today a real openess towards these questions and issues. why? because we deal with massive institutional failure and we simply have to rethink economic theory and institutional designs not only from a Field 1 or Field 2 perspective (that is, ego-system awareness) but also from a Field 3 or Field 4 perspective (that is, eco-system awareness). the biggest blind spot today is how we can create Field 3 and Field 4 innovations in infrastructures that faciliate ecosystem awareness, collective leadership action and profound social innovation across all systems levels? we know how to do it in smaller settings. but how does that apply to the macro and mundo scale of societal renewal today?

what do YOU see going on in your environment? how do you see people make sense of the current depression economics? where do you feel drawn to re next steps?

–otto